Shares in Premier Investments have rallied despite a first-half profit slump, after billionaire chair Solomon Lew said he was in no rush to spin-off a key brand until the valuation was right.
Premier posted a first-half net profit after tax of $117.1 million, with pre-tax profits down 12.7 per cent as sales for kids stationary giant Smiggle slumped 14.5 per cent from the equivalent half.
Total sales were down 1.8 per cent to $455 million, excluding sleepwear brand Peter Alexander UK, due to "a challenging discretionary retail environment".
Peter Alexander meanwhile delivered record sales of $297.7 million, up 6.6 per cent on the same half last year.
Despite the result, which was in-line with earlier forecasts, Premier Investments shares surged more than 5 per cent to over $22 by lunchtime on Friday, after chair Solomon Lew told a media call a much-anticipated Smiggle spin-off wouldn't happen until the price was right.
"We would like to get some runs on the board," Mr Lew told reporters.
"We want to see some recoveries in the overseas markets that we work in, and the Australian market as well."
A potential Smiggle listing had originally been flagged for January 2025, and a Peter Alexander spin-off is also under consideration.
"I wouldn't be expecting a Smiggle spin-off in the short term, but certainly, depending on on its performance and the valuation."
Mr Lew also noted Premier was being prudent with its Peter Alexander UK expansion and was holding off on opening new stores.
"We've got stores earmarked, but we won't be opening any more stores until we see some positive signs in the marketplace that the economy is recovering," Mr Lew said.
"We're establishing the brand."
Premier's net profit before tax was down 12.7 per cent to $148.4 million.
The half was the last six months Premier would own its Apparel Brands group, which it sold to Myer in January.
Apparel included fashion retailers Just Jeans, Jay Jays, Dotti, Portmans and Jacqui E.
The seven retail brands delivered underlying earnings before interest and tax of $162.0 million, global sales of $857.8 million and a gross margin of 62.7 per cent for the half.
Premier also no longer holds any interest in Myer shares.
The Apparel transaction and cooling sales left Premier shareholders without an interim dividend this time around.
"Over the past five years Premier has distributed over $850 million in fully franked dividends to Premier shareholders," Mr Lew said.
"This is in addition to the February 2025 in-specie distribution of $1.03 billion value of Myer shares plus $387 million in franking credits to eligible shareholders."
Premier Retail interim chief executive John Bryce said Smiggle and Peter Alexander sales remained best in class.
"Looking ahead, Premier Retail is focused on the future growth opportunities of Peter Alexander and Smiggle with investment in new initiatives for these much-loved brands," Mr Bryce said.
When asked a question about ousted Smiggle boss John Cheston, who was sacked last September amid allegations of serious misconduct and interference with human resources probes, Mr Lew confirmed investigations were ongoing.
"So that's all I'm going to say on this issue at this point in time, that it is a very serious matter."
